In re Thomaston Mills, Inc. (01-52544)
The Chapter 11 debtor's board of directors voted to terminate a severance benefit plan some five days prior to filing for bankruptcy relief. Certain former employees of the debtor filed proofs of claim for severance pay. The employees contended that the severance plan's termination was not effective because a "change in control" of debtor had occurred. The employees also contended that the board of directors was not acting in good faith in terminating the severance plan. The Court held that the board of directors' vote to terminate the severance plan was effective.